UPDATE 4-Apple’s Mac sales shine, iPhone just below St view

* iPhone sales 8.7 mln versus Wall St target of 9 mln

* Strong international sales and improved gross margin

* Accounting changes stoke confusion among some analysts

* Apple shares up 1 percent after hours
(Adds more details from report)

By Gabriel Madway

SAN FRANCISCO, Jan 25 (BestGrowthStock) – Apple Inc (Read more about Apple stock future.) (AAPL.O: )
reported record sales of Mac computers and strong growth
overseas, but iPhone shipments were slightly below some of Wall
Street’s most bullish forecasts.

The company also reported a sharply better gross margin as
it benefited from more favorable component costs and higher
revenue.

Apple’s stock edged higher in after-hours trading, after
closing up 2.7 percent on Nasdaq before the news. Investors had
also snapped up the stock ahead of the Wednesday launch of a
product expected to be a tablet computer. [ID:nN16364236]

International sales made up nearly 60 percent of Apple’s
revenue in the quarter, with big growth seen in the Asia
Pacific region, Japan and Europe.

Apple said on Monday it shipped 8.7 million iPhones in the
holiday quarter, just short of the Wall Street target of
roughly 9 million. Apple’s iPhones compete with Research in
Motion’s (RIM.TO: ) BlackBerry and other smartphones.

Mac sales continued to show momentum, rising 33 percent
from a year ago to 3.36 million units. Analysts’ average
estimate was about 3 million Macs.

Gross margin rose to 40.9 percent from 37.9 percent a year
ago, trouncing Wall Street’s estimate of 35.8 percent, on a
continued shift toward higher-margin products like Macs and
iPhones.

“Mac sales were very strong, which more than offset what
might be perceived as a ho-hum iPhone number,” said Bill
Kreher, an analyst with Edward Jones.

“Maybe some on the Street were getting a little euphoric
with their expectations on the iPhone.”

Although Wall Street is already looking ahead to the tablet
announcement, Apple’s holiday-quarter results may have provided
the company with a strong start to the week.

Apple, which has surpassed Wall Street expectations for
earnings per share by at least 15 percent in the past four
quarters, adopted new accounting standards for its fiscal first
quarter.

The company posted net income of $3.38 billion, or $3.67 a
share in the fiscal first quarter ended Dec. 26, up from $2.26
billion, or $2.50 cents a share, in the year-ago period.

Revenue rose to $15.68 billion from $11.9 billion.

Analysts had expected Apple to earn $2.09 per share on
revenue of $12.09 billion, according to Thomson Reuters
I/B/E/S, but the numbers were not comparable given the surprise
accounting change.

“There is a bit of confusion because the consensus numbers
are somewhat meaningless (due to new accounting). There is a
state of confusion,” said Kaufman Bros analyst Shaw Wu. “What
we do know is the iPhones were light. People were looking for
closer to 9.5 (million).”

Under the new accounting standards that affect products
that combine software and hardware, Apple will be able to
recognize substantially all of the revenue from the iPhone and
Apple TV when they are sold. Such revenue was previously
recognized over two years.

Apple forecast earnings for the current quarter of $2.06 to
$2.18 a share on revenue of $11 billion to $11.4 billion. Wall
Street analysts, on average, had expected earnings of $1.77 a
share on revenue of $10.37 billion, but again it was unclear if
those estimates were comparable.

Apple’s stock has more than doubled over the past 12
months. The stock rose above $205 after closing at $203.08 on
Monday.

“Apple has reached its distribution profile by and large
that it’s going to reach for the iPhone,” said Gartner Research
analyst Van Baker. “So you would expect that growth would slow
somewhat because now it becomes a replacement market as opposed
to a new user market.”

Stock Trading

(Writing by Edwin Chan; Editing by Richard Chang)

UPDATE 4-Apple’s Mac sales shine, iPhone just below St view